We have advised 21,000 home housing association Network Homes Limited on its £175m private placement funded by a combination of US and Canadian investors. The placement was arranged by Mitsubishi UFJ Financial Group (MUFG).
The association’s development program pipeline of 3,000 homes will be supported by the funds raised by the placement.
A critical point in the documentation was to successfully cater for the needs of both the unsecured and secured funders, as the issue included a 3.52% £25m unsecured series of notes alongside the four series of secured notes, with pricing ranging across the secured series from 2.94% for £19m of 12-year debt to 3.65% for £47m of 30-year debt and £38m of 35-year debt.
The Note Purchase Agreement itself was based on the US standard Model Form X but had to be adapted to effectively accommodate the market standard covenants for a UK based issuer in the social housing sector, as well having to cover the distinct covenant requirements for the unsecured and secured debt.
The Winckworth Sherwood team was led by Partner and Head of Social Housing Finance Louise Leaver with support from solicitor Rosanagh Herries on the finance side. The charging work was led by Jill O’Reilly with support from Hayley Turner.
Louise Leaver said: “Issuances by registered providers on the capital markets are attracting interest from US and other overseas investors. The innovative structuring of an issue of this size to obtain both unsecured and secured funding indicates an increased interest in different structures for financing developments and could open up the sector to a wider pool of investors more generally. We were delighted to be able to assist Network in securing stable long-term funding to support their ambitious development programme.”
Jenny Hodgkins, Head of Treasury Services at Network Homes Limited said: “We’re delighted with the outcome of the transaction and the attention from overseas investors for this type of deal. Louise and the Winckworth Sherwood team drew on their expert knowledge of the sector to provide excellent support throughout the transaction.”
This placement is one of several capital market issuances by registered providers with US funders that the team has acted on.